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Federal Communications Commission
DA 98-493
Before the
Federal Communications Commission
Washington, D.C. 20 554
In re Application of )
)
AMSC Subsidiary Corporation) File Nos. 29-SAT-ML-98
) 627-SSA-MP/L-98(2)
For Modification of Mobile Satellite )
Service License )
)
For Modification of Earth Station )
Licenses )
ORDER AND AUTHORIZATION
Adopted: March 12, 1998 Released: March 13, 1998
By the Chief, International Bureau:
Introduction
1. With this Order, we grant the application of AMSC Subsidiary Corp. ("AMSC")
to modify its satellite license to permit it to change its space station facility and to operate the
new facility temporarily from a different orbital location. We also grant AMSC special
temporary authority to use two existing earth stations to communicate with the new satellite
at the transitional orbit location.
Background
2. AMSC has a license to construct, launch, and operate a three-satellite mobile
satellite service (MSS) system using frequencies in the upper L-Band. It launched its first
satellite, AMSC-1, in 1995, to an assigned location of 101 degrees W.L. It has yet to launch
another satellite, and international coordination problems may preclude it from operating
additional satellites on the currently authorized frequencies.
3. Instead of continuing to provide MSS via AMSC-1, AMSC proposes to use
capacity on another geostationary satellite for that purpose. It would then lease AMSC-1 to
African Continental Telecommunications, Ltd. ("ACTEL"), a South African company that
would relocate that satellite and use it to provide service in southern Africa. AMSC plans to
lease AMSC-1 to ACTEL for five years. The satellite that AMSC proposes to use in place
of AMSC-1 is MSAT-1, currently owned by TMI Communications and Company, L.P.
("TMI"), a limited partnership organized under Canadian law with headquarters in Ontario,
Canada. TMI launched MSAT-1 in 1996. MSAT-1 operates at 106.5 degrees W.L. to
provide MSS to Canada under Canadian license. Under the proposed arrangement, AMSC
would acquire a one-half interest in MSAT-1 and would shift its operations to that satellite,
which would be moved to 101 degrees W.L. and which AMSC and TMI would then share.
Each company would continue to provide service independent of the other, each in
accordance with the terms of its license, each having access to half the satellite's power and
to any internationally-coordinated spectrum assigned to it by its national licensing authority.
AMSC would continue providing MSS to customers in the United States, using its existing
U.S. earth-station facilities for network control and feeder link operation. AMSC would
have full control of the operation of the transponders assigned to it under the satellite-sharing
arrangement. Decisions concerning adjustment of the attitude and position of the satellite
would be by consensus of AMSC and TMI and would be submitted to arbitration, pursuant to
the terms of the agreement between those two parties, in the event of dispute. Telemetry,
tracking, and control would be managed under contract with the joint owners by Telesat
Canada.
4. In order to enable ACTEL to test AMSC-1 before moving it, AMSC proposes to
route its traffic through MSAT-1 in its current location at 106.5 degrees W.L. for
approximately two months. After that, it would continue to use MSAT-1 while it is moved
to 101 degrees W.L., which would take about one week. Accordingly, AMSC asks for
special temporary authority to use its existing earth station facilities to transmit to MSAT-1 at
106.5 degrees W.L. and while it is in transit from that location to 101 degrees W.L. AMSC
maintains that the in-transit operation of MSAT-1 would not cause interference to other
satellite systems. It asserts that no other satellite in the orbital arc between 106.5 degrees
W.L. and 101 degrees W.L. uses the same feeder link frequencies, the proposed transitional
use of the service-link frequencies has been coordinated with the Mexican satellite at 105
degrees, and it expects to complete routine coordination of the telemetry, tracking, and
control frequencies prior to the shift.
5. AMSC represents that MSAT-1 is identical to AMSC-1, except that MSAT-1 uses
a telemetry frequency, 11702.75 MHz, that has not been assigned for use by AMSC-1. It
adds that it has renegotiated its coordination agreement with GE Americom, which operates a
Ku-Band Fixed satellite at 101 degrees W.L., to reflect the proposed use of the new Ku-Band
telemetry frequency.
6. AMSC maintains that the proposed arrangement would bolster its financial
viability and would not entail any significant impairment of service. AMSC points out that it
incurred costs of more than $600 million to construct and launch its satellite system and that
demand for MSS in the United States has not developed as rapidly as anticipated during its
first year of commercial operation. As a result, it now has a critical need to improve cash
flow. The proposed arrangement would enable AMSC to earn income from presently unused
capacity without losing revenue from its existing customer base and serve to enlarge its
market for selling mobile terminals. AMSC says that it would use the additional revenue to
develop its core business by enhancing service offerings, developing more advanced customer
equipment, and enlisting new subscribers.
7. AMSC adds that it is making plans for a second generation system involving use
of a higher power satellite capable of linking with hand-held terminals and that when U.S.
demand for MSS increases enough to warrant construction of such a system, MSAT-1 would
be moved back to 106.5 degrees W.L. so that the second-generation AMSC satellite could be
operated in the 101 degrees W.L. orbit position. Alternatively, AMSC says that it might
eventually bring AMSC-1 back to 101 degrees W.L. to meet increased U.S. demand. Due
to uncertainty as to the timing of such developments, AMSC requests that authority for use
of MSAT-1 be granted for a term of at least five years.
Discussion
8. The Commission's goal is to license satellites in a manner that promotes
competition, flexibility, and technical innovation. To this end, the Commission attempts,
when possible, to leave spacecraft design decisions to the space station licensee because the
licensee is in a better position to determine how to tailor its system to meet the particular
needs of its customers. Consequently the Commission will generally grant a licensee's
request to modify its system, provided there are no compelling countervailing public interest
considerations.
9. Here, AMSC has made a significant investment in constructing and launching
AMSC-1 and operating it for two years. Traffic, however, has not materialized as
anticipated. AMSC now seeks, in essence, to lease its unused capacity to ACTEL and to
continue to serve its customers using the MSAT-1 facility. AMSC states that this transaction
will provide it with a needed cash infusion, while allowing it to continue to serve its
customers with minimal disruption. This is the type of business decision that, absent
compelling countervailing reasons, the Commission prefers to leave to the judgment of its
licensees.
10. CruisePhone, Inc., which uses capacity purchased from AMSC to provide mobile
communications service to cruise ships and other commercial vessels, opposes AMSC's
application. It asserts that it and its customers would be harmed if AMSC's coverage of the
Caribbean were disrupted during the period of operation from 106.5 degrees W.L.
CruisePhone argues that during the two months when AMSC will be providing service using
MSAT-1 at 106.5 degrees W.L., AMSC's ability to serve the eastern edge of its coverage
area will be impaired, adversely affecting CruisePhone's service to ships in the Caribbean.
Further, CruisePhone is concerned about possible impact on its service while MSAT-1 is
moving to 101 degrees W.L. CruisePhone requests that we withhold action on AMSC's
application until AMSC demonstrates that the proposed change can be effected without
impairing CruisePhone's service.
11. AMSC acknowledges that there might be some minimal disruption to
CruisePhone's customers. AMSC represents, however, that other than a brief outage early
on a Sunday morning, there will be no impact on service within the contiguous United States,
Puerto Rico, or the Virgin Islands. AMSC also concedes that its proposed operation from
the 106.5 degree W.L. orbit location during the two months ACTEL will be testing AMSC-1
at 101 degrees W.L. may result in a small loss of coverage in the eastern part of its southern
beam. At worst, then, it appears that the proposed transaction will result in a two-month
service loss in part of the Caribbean and a brief service outage to all customers while
AMSC's traffic is shifted from AMSC-1 to MSAT-1.
12. These consequences are relatively slight in comparison with the benefits to be
gained from more economically efficient use of satellite facilities. Enabling AMSC to secure
needed funds by receiving compensation for its unused capacity will improve AMSC's
commercial viability, placing it in a better position to continue to operate and expand its
system, including constructing and launching a second generation system. In response to
commercial incentive to meet its customers' needs, AMSC can be expected to take all
reasonable measures to keep disruption to a minimum and to honor any contractual
commitments it has with customers.
13. A potential AMSC customer, Radio Satellite Corporation ("RSC") also opposes
the application. RSC asserts that when it contacted AMSC recently about obtaining service
for resale to customers in the United States, AMSC demanded a higher yearly rate for using
only a fifth of AMSC-1's capacity than it now proposes to charge ACTEL for leasing the
entire satellite to provide service to Africa. RSC asserts that AMSC, as a common carrier,
is obliged by the terms of its license and by the Communications Act to provide service in
the United States at reasonable and non-discriminatory rates. RSC therefore asks us to order
AMSC to offer to lease AMSC-1 for use in the U.S. at a rate no higher than it has offered
ACTEL.
14. The lawfulness of AMSC's rates is not at issue here. AMSC's application
requests permission for facilities changes. If its application is granted, AMSC simply will be
providing common carrier service using MSAT-1 instead of AMSC-1. We see no reason,
even assuming AMSC's rates were unlawful, to require AMSC to provide service to RSC
using the AMSC-1 satellite rather than using the MSAT-1 satellite. In any event, the fact
that AMSC has offered to lease a bare satellite to ACTEL that will be licensed by another
administration to provide service in a different region of the world, under control from
ground facilities to be provided by ACTEL, at a lower rate than it charges for providing
MSS via its own space and ground facilities does not demonstrate that it is charging unjust or
unreasonably discriminatory rates for "like" communication services.
15. RSC also urges us to initiate a proceeding in which to consider reassigning
orbital locations and spectrum from AMSC to new MSS licensees. Noting that AMSC has
missed the deadlines specified in its license for launching a second and a third satellite into
orbit at 62 degrees and 139 degrees W.L., RSC asserts that there is no reason to allow
AMSC to continue to hold a claim to those orbit locations. Rather, RSC contends those
locations should be made available to others willing to establish competing geostationary
MSS systems. RSC also contends that "the L-Band spectrum which would become available
should the Commission allow AMSC to move AMSC-1 to Africa" should likewise be
reassigned. AMSC's requests for extension of the milestone dates for AMSC-2 and AMSC-
3 are at issue in a separate proceeding and are therefore outside the scope of this order.
Moreover, as indicated, the Commission has acknowledged that it has not been able to
coordinate sufficient L-Band spectrum for AMSC to support a three satellite U.S. system.
In any case, the fact that AMSC has not launched satellites into the 62 degrees W.L. and 139
degrees W.L. orbit locations has no material bearing on disposition of its application for
permission for a change of facilities at 101 degrees W.L. Further, RSC's premise that
implementation of the proposed facilities changes would allow reassignment of L-Band
spectrum is incorrect, given AMSC's plan to operate MSAT-1 from the position to be
vacated by AMSC-1, using the same L-Band frequencies as before.
16. Accordingly, we conclude that the commenters have raised no compelling
objection to grant of AMSC's application. Further, we see no other countervailing reason to
deny the application. AMSC characterizes its transaction with ACTEL as a five-year lease.
We note that once AMSC-1 is moved from its assigned 101 degree W.L. position in order to
provide communications services in southern Africa, the United States will relinquish its
status as the licensing administration for that satellite while it is operating at the new orbital
location serving Africa. If ACTEL wishes to obtain international coordination status for
such operation of AMSC-1 pursuant to the Radio Regulations of the International
Telecommunication Union ("ITU"), it should arrange with another administration to provide
the appropriate advance publication, coordination, and notification information to the ITU in
order to fulfill its coordination obligations with respect to satellite networks of other affected
administrations.
17. We do not foresee any insurmountable difficulties with respect to AMSC's
proposal for joint U.S.-Canadian licensing and coordination responsibility for MSAT-1.
While this is the first time the Commission has been asked to "share" a satellite with another
licensing administration, there appears to be nothing in the international Radio Regulations
that would preclude such an arrangement. Significantly, AMSC and TMI will be operating
on discrete band segments, providing a concrete delineation of responsibility between the two
administrations. We will, of course, consult with the Canadian government to ensure that
there is a mutual understanding of each other's responsibilities with regard to our respective
requirements and obligations to operate at 106.5 degrees and 101 degrees W.L. to maintain
the appropriate coordination status in accordance with the Radio Regulations. Further, we
will continue to hold AMSC responsible for its use of the spectrum and will expect it to
continue to comply with all relevant Commission requirements.
18. Accordingly, pursuant to authority delegated by Section 0.261 of the
Commission's Rules, 47 C.F.R. 0.261, IT IS ORDERED that Application File No. 29-
SAT-ML-98 IS GRANTED to the extent indicated herein, and that the satellite license of
AMSC Subsidiary Corporation IS MODIFIED to permit AMSC to route traffic via MSAT-1
at 106.5 degrees W.L., using its previously assigned frequencies, until AMSC-1 is removed
from 101 degrees W.L.; to continue such operation while MSAT-1 is shifted from 106.5
degrees W.L. to 101 degrees W.L.; and then to route traffic via MSAT-1 at 101 degrees
W.L., using those same frequencies, until March 13, 2003. Except insofar as expressly
modified herein, the previous terms of AMSC's satellite license shall remain in effect.
19. IT IS FURTHER ORDERED, pursuant to 47 U.S.C. 25.119, that Application
File No. 627-SSA-MP/L-98(2) IS GRANTED, and AMSC Subsidiary Corporation IS
AUTHORIZED to use fixed earth stations E930124 and E940374 to communicate with
MSAT-1 at 106.5 degrees W.L. and to communicate with MSAT-1 while it is in transit from
that location to 101 degrees W.L. and also to allow its licensed mobile earth terminals to be
used to communicate with MSAT-1 in those positions. This temporary authority shall expire
on September 13, 1998.
20. IT IS FURTHER ORDERED that AMSC SHALL COORDINATE transitional
use of telemetry, transfer, and control frequencies with operators of affected satellites at
orbital positions between 106.5 degrees and 101 degrees W.L. before MSAT-1 commences
transit between those positions and SHALL ALSO COORDINATE with the operator of any
affected satellite at 101 degrees W.L. regarding use of any frequency not previously assigned
to AMSC for telemetry, transfer, and control transmission.
21. This authorization is conditioned upon and subject to modification insofar as
necessary for compliance with any subsequent agreement between representatives of the
governments of Canada and the United States concerning shared use of MSAT-1.
22. The assignment of orbital positions or particular frequencies to AMSC is subject
to change by summary order of the Commission on 30 days notice and does not confer any
permanent right of use. Neither this authorization nor the rights granted thereunder may be
assigned or otherwise transferred in violation of the Communications Act, and the rights
granted herein are subject to the rights of use or control conferred by 47 U.S.C. 706.
23. This order is effective upon release.
FEDERAL COMMUNICATIONS COMMISSION
Regina M. Keeney
Chief, International Bureau